Mono currency is a right and a great idea yet its implementation framework is fundamentally not only flawed but it’s based on evil ideas and lies.
The start of the journey is rotten.
The versions of Reserve Bank of Zimbabwe have been evil since the leadership of Dr Gideon Gono till today.
Each of the governors delivered excruciating pain to the general populace with currency experiments that were so ill thought and implemented in a manner to extract the most pain from the people.
The evil at the RBZ now is so obnoxious any caring citizen can smell the pungency. I highlight the idea in brief as follows:
First, we need productive sectors to get incentives on exports instead of them being punished.
At the moment an exporter is having part of his export proceeds subject to a thirty percent (30%) retention to be paid in Zig. It becomes less profitable because most, if not all, of cost of production is in United States dollars.
We have hundreds of potential exporters who do maths and realise it’s better not to produce for export.
We are not encouraging growth and the retention because of a façade that there is willing buyer and will seller by claiming we can exchange currency and that the people actually want to do that.
No one wants to exchange any money to ZiG outside payment of Income Tax.
As this atrocity visits the common farmer or miner the selected few actually get incentives for export and in addition are allowed to obtain their retention at a discounted rate from the crony banks.
Its flawed to think there is an open and transparent foreign exchange trade to support this 2030 move to mono currency. We are planning on a lie.
Second, after all the effort individuals and corporates put in agriculture and mining, the export retention is not paid in time. It even goes for year
An economist who does not understand the time value of money and impact on going concern is not fit for purpose.
The money retained does not even earn interest.
The RBZ is subsidising the ZiG using non-payment of exporters. That cannot be a basis that a currency is stable and try theatrics of moving away to a multi-currency.
Third, they don’t contractors and exporters so we know the real value of Zig. They are owed for over a year.
If you have ZiG or are going to be paid by ZiG, it’s not if but when it will decline to its real value. Quantitative tightening is artificial and predatory.
The impact of US$2.7 owed to contracts shows the real value of ZiG is way lower if these contractors are paid and they start chasing the US$.
It is evil and immoral for RBZ to support a currency on the going concern challenges of local business people.
Fourth, it just makes no sense that gold prices are at an all high EVER of US$3050, yet ZIG value remains fixed. Backing is a charade!
Even if it was backed by US$ the interest intervention of the Federal Reserve would have positively impacted its value.
The RBZ sold us a dummy and using communication machinery to maintain a lie.
Sixth, reserves are said to have moved from US$250 million to US$750 million in a year, yet it has had no impact on ZiG circulation and exchange rate.
ZiG is not backed by gold. It’s not even backed by anything
It is at the its value simply by not paying contractors and exporters. That predatory quantitative tightening is making companies go under.
Seventh, companies are now subsidizing a whole government so as to support an artificial exchange rate.
It means the tax base is not enough for treasury to make payments and RBZ can’t be compelled to print.
Eight, the system in general, including domestic revenue collection, punishes the formal for being compliant and rewards the informal. By their general actions it promotes underground marketing and smuggling.
Smuggling is a big idea because RBZ, ZIMRA, MMCZ, EMA, Trade measures and local authorities they punish if an entity gets to them.
Ninth, we are being led to a road of mono currency, which is based on a lie about the past and the present.
Without the people knowing how the Gono and Mangudya deliberate incompetence’s are to be corrected this is a movement of non-believers.
Tenth, during gedye gedye the RBZ knew the US$ reserves were not equal to printed money. Now they are on repeat knowing the reserves are fake.
There was broader money (M3) which was increasing daily since 2023 as government was keeping the idea that we were transacting in US. It was fake and the hole became huge.
To cover the hole, the gedye gedye they had to punish individuals and corporates.
Now they are punishing exporters, grain producers and miners.
They will likely punish bank accounts as reserves will not grow from taxation but incentives.
We desire a mono currency, but right now, the idea is based on false fundamentals and basically using the gedye principles.
They must change the approach and base it on brutally honest and moral principles.
Brian Sedze is a strategy, innovation and research consultant
